Ten years ago, Ginny inherited $50,000 from her grandmother. She decided to invest all of this money in GE stock. Suppose she decides to sell the stock today so she can purchase her first home. The sale price of the stock is $64,500. Calculate the size of Ginny's taxable capital gain.

Ten years ago, Ginny inherited $50,000 from her grandmother. She decided to invest all of this money in GE stock. Suppose she decides to sell the stock today so she can purchase her first home. The sale price of the stock is $64,500. Calculate the size of Ginny's taxable capital gain.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter9: Acquisitions Of Property

Section: Chapter Questions

Problem 60P

See similar textbooks

Related questions

Q: Several years ago, sisters Jan and Jill, purchased an apartment complex and titled it as joint…

A: Gross estate refers to the term which is used for defining the total or aggregate dollar value of…

Q: Rebecca owns a condominium in Chicago with a tax basis of $298,000 at the beginning of the year.…

A: Gross rental receipts refer to the amount collected from tenants for the property provided to them…

Q: Abby, a single taxpayer, purchased 10,000 shares of § 1244 stock several years ago at acost of $20…

Q: Anna bought a life insurance policy on her own life for a premium of P50,000 per annum for 10 years.…

A: Return on capital (ROC) is a ratio that can be used in ascertaining an organization's profitability…

Q: Abby purchased 100 shares of her dad’s favorite stock for $25.80 per share exactly 1 year ago,…

A: Computation of total amount will receive in next year: Answer: The total amount that Abby will…

Q: The amount of realizable income for Meredith and Derek in 2020 is $_____. The amount included in…

Q: Chrissy receives 200 shares of Chevron stock as a gift from her father. The stock cost her father…

A: Gain: If sale price is higher than purchase price then it's called gain.

Q: Phil Cousteau is an accountant. Phil is 47 years old and is married to Claire who is 45 years old.…

A: Tax refers to the compulsory charge levied by the government over the money gained by an entity.

Q: Sam purchased a house in San Francisco, CA, in 1952 for $15,000. He never married but had several…

A: $ 1824253 The question related to capital gain tax on long term capital assets as the holding period…

Q: Alex is a carpenter who purchased a vacant block of land in Sydney on 1 October 1980. On 1 September…

A: Gains: Gains are the profits earned from non-operating activities of a business like sale of land,…

Q: Tammy, who is single, purchased 1,000 shares of qualified small business stock in Startup, Inc., in…

A: Qualified Small Business Stock - It is provision 1202, which provides tax benefits to individual who…

Q: Mary received stocks as a gift from her father. At the time of gift the stocks have a fair market…

A: To calculate the Tax basis of the stocks received as a gift following 3 amounts should be considered…

Q: Sheila inherited 300 shares of stock, 100 shares of Magenta and 200 shares of Purple. She has a…

A: Tax return refers to the process of documenting the financial reports which depicts the income,…

Q: Diana sold mutual fund shares she had owned 4 years so that she could use to the proceeds to travel…

A: Given : Capital gain = $ 75258 Marginal tax bracket = 35% And , Capital gain tax rate = 15%

Q: Three years ago, Kenesha purchased $10,000 worth of stock in major U.S. corporations. She spent…

A: Capital gains or losses arise when an investment is sold by the investor. If the investment is sold…

Q: Dan is the sole owner of his closely held business and he is considering retiring within the next…

A: The transfer of a business to the heir after the retirement of the original owner is referred to as…

Q: Tom sold mutual shares he had owned 3 years so that he could use the proceeds to return to college.…

A: The capital gains will be treated long-term capital gains as they are held for more than 3 years.…

Q: Juan received an inheritance from his grandfather. Worried of spending the money unproperly, he…

A: Total amount = $3,000,000 Time = 2 years No of weeks = 52 *2 = 104 Rate = 2%…

Q: jesse recieved $5,000 from his grandmother when he turned 18. if he invests it at 5.5%(12), how much…

A: The question gives the following information:

Q: Ansel purchased raw land three years ago for $200,000 to hold as an investment. After watching the…

A: It is given that Ansel purchased a raw land as investment for $200,000 three ago now Ansel has…

Q: jordan sells 100 shares of TD bank on August 31. She purchased the shares for $500 and sold them for…

A: The taxable income is the earning which is subject to tax that is the taxpayer is liable to pay…

Q: Melissa had a $200,000 long-term capital gain when she sold some of her Bitcoin in 2021, bringing…

A: When a capital asset is sold, the phrase capital gain refers to the rise in its value. Simply put, a…

Q: Determine Abby's total AGI under both options for the current year and next year.

A: AGI the Adjusted Gross Income can be defined as the result of the deduction of specific deductions…

Q: Abby purchased 100 shares of her father’s favorite stock for $27 per share exactly 1 year ago,…

A: Reinvestment is a process of using the earned income on previous holdings in a new investment in…

Q: Erika inherits $20,000, and decides to invest it in an account earning 6.25% interest, compounded…

A: Formula Future value = PV*(1+i)n Where PV - Investment i.e. $20,000 i - Semi annual interest rate…

Q: Heather makes cash contributions during the current year of $30,000 and donates property worth…

A: Capital gains refer to the profit earned over when a capital asset is being sold more than its…

Q: In 2018, Joshua gave $10,500 worth of XYZ stock to his son. In 2019, the XYZ shares are worth…

A: Shares refer to the equity that represents the ownership interest in the organization. Shares are…

Q: Kim's net worth at the beginning of the year is $250,000. Across the year she earns $60,000 before…

A: The amount of assets and liabilities would be resulted the net worth. It is the assets over the…

Q: Ms. Jones owns all of the shares of Jones Co. She has had the company valued and 50% of the shares…

A: In the given case, the 50% of the shares are worth $100,000 that means the worth of total shares : =…

Q: Abby purchased 100 shares of her father’s favorite stock for $27 per share exactly 1 year ago,…

A: Return on investment shows the return or earnings on the investment. The return on investment is the…

Q: What are the tax implications of the sale?

A: Solution:- Given, Chad takes a distribution of the CRP stock several years Stock value = $500,000…

Q: Aaron and Melissa are looking to sell their house for $700,000. They purchased the house seven years…

Q: What is correct?

A: Given information is: Auntie sold some stock she purchased several years ago for $10,000 to Niece…

Q: Isabel Lopez, from Lewiston, Idaho, is age 19, and she recently received an inheritance of $50,000…

A: The future value function can be used for determining the future value of a present sum, or the…

Q: Lana, a single individual, was looking for an investment that would give some diversity to her stock…

A: Shares: Shares are the number of units held by a company as its stock. It is segregated into two…

Q: Sam owns 1,500 shares of Eagle, Inc. stock that he purchased over 10 years ago for $80,000. Although…

A: Sam owns 1,500 shares of Eagle, Inc.Cost of share = $80,000.Current Market Value = $52,000

Q: George is the owner of numerous classic automobiles. His intention is to hold the automobiles until…

A: Present value (PV) is defined as the current amount of future sum of money provide a particular rate…

Q: Liam bought shares of stock of a publicly-listed domestic company in 1997 at a cost of P200,000. In…

A: The capital gain is the gain that is received by the company from selling the assets, land, and…

Q: Melissa sold some of her Bitcoin in 2021 for a $200,000 long-term capital gain, bringing her total…

A: When a capital asset is sold, the phrase capital gain refers to the rise in its value. Simply put, a…

Q: Pepa Madrigal has operated a very successful bakery for 30 years, and has accumulated investment…

A: Rate of tax = 12% Single taxpayer from 10276 to 41775 is taxed at the rate of 12%.

Q: Michelle had a $200,000 long-term capital gain when she sold part of her Bitcoin in 2021, increasing…

A: When a capital asset is sold, the phrase capital gain refers to the rise in its value. Simply put, a…

Q: If Deshaun gifts his niece $100,000 in stock which he bought for $25,000, what is his niece's basis?

A: The basis is termed as the monetary value paid for acquiring any stock. When Mr. D purchased the…

Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

Question

Definition Definition Increase in the value of a capital asset and the amount that is realized when the asset is sold off. A capital gain may be short-term or long-term depending on the tenure for which the asset is held.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Capital gain calculation

VIEW

Step 2: Putting the values in the formula

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Olivia wants to buy some vacant land for investment purposes. She cannot afford the full purchase price. Instead, Olivia pays the landowner $51,900 to obtain an option to buy the land for $1,038,000 anytime in the next four years. Fourteen months after purchasing the option, Olivia sells the option for $64,875. What is the amount and character of Olivia's gain or loss? She has a long-term capital gain of $ .
Jenny and Jerry have a home with a fair market value of $625,000. They borrowed $400,000 ten years ago to purchase the home. They currently owe $250,000 on the acquisition loan. They recently borrowed $110,000 on a home-equity loan. The proceeds were used to purchase a car, take a vacation, and redecorate their home. What is the maximum amount of their indebtedness that can generate deductible interest in the current year?
Kristen is trying to decide how to invest a $10,000 inheritance. One option is to make an additional investment in Rocky Road Excursions in which she has an at-risk basis of $0, suspended losses under the at-risk rules of $7,000, and suspended passive activity losses of $1,000. If Kristin makes this investment, her share of the expected profits this year will be $8,000. If her investment stays the same her share of the expected profits this year will be $1,000. Another option is to invest $10,000 as a limited partner in Ragged Mountain Winery, the investment will produce passive activity income of $9,000. Kristin is in the 24% tax bracket. What are the effects on Kristen's after-tax income from each of the two options?
Chrissy receives 200 shares of Chevron stock as a gift from her father. The stock cost her father $9,000 10 years ago and is worth $10,500 at the date of the gift. a. If Chrissy sells the stock for $12,500, calculate the amount of the gain or loss on the sale. b. If Chrissy sells the stock for $4,600, calculate the amount of the gain or loss on the sale.
Abby purchased 100 shares of her dad’s favorite stock for $25.80 per share exactly 1 year ago, commission free. She sold it today for a total amount of $2865. She plans to invest the entire amount in a different corporation’s stock today, but must now pay a $50 commission fee. If she plans to sell this new stock exactly 1 year from now and realize the same return as she has just made, what must be the total amount she receives next year? Include the commission fee as a part of the purchase price, but neglect any tax effects.
Jared bought a gold ring Necklace for $600 -1 year ago, and sell it today for $1,700. How much Net Capital Gain will be included in Jared's Assessable Income? Please provide short explanation
Florence purchased stock 4 years ago for $20,000. Last year she gifted the stock to her son when the fair market value was $15,000. This year her son sold the stock for $18,000. What is her son's recognized gain or loss on the sale?
Ten years ago, Ginny inherited $50,000 from her grandmother. She decided to invest all of this money in GE stock. Suppose she decides to sell the stock today so she can purchase her first home. The sale price of the stock is $64,500. Suppose that at the beginning of the ten year period the Consumer Price Index (CPI) was 125 and today the CPI is 215. Use this information calculate the value of Ginny's initial investment in terms of today's dollars.
Alan inherited $100,000 with the stipulation that he"invest it to financially benefit his family." Alan and his wife Alice decided they would invest the inheritance to help them accomplish two financial goals: purchasing a Park City vacation home and saving for their son Cooper's education. INVESTMENT: Initial Investment; Investment horizon VACATION HOME: $50,000; 5 years COOPER'S EDUCATION: $50,000; 18 years. Alan and Alice have a marginal income tax rate of 32 percent (capital gains rate of 15 percent) and have decided to investigate the following investment opportunities. Growth Stock: 5 years, Future Value = $$65,000: What is the Annual After-Tax Rate of Return: _____________% : 18 years, Future Value = $140,000: What is the Annual After-Tax Rate of Return: _____________%
Aaron and Melissa are looking to sell their house for $700,000. They purchased the house seven years ago for $480,000 and didn't have any adjustments to factor in. If Aaron and Melissa sell their house for $700,000, how much will they have to pay in capital gains? O $700,000. Married couples are required to pay capital gains on the final sales price. O $220,000. All sellers have to pay capital gains on the sales price minus the price they originally paid. O $0. The $500,000 capital gains exclusion will allow them to write off any profits earned on the property. $0. Capital gains is only paid on commercial properties.
Abby purchased 100 shares of her father’s favorite stock for $27 per share exactly 1 year ago, commission free. She sold it today for a total amount of $3225. She plans to invest the entire amount in a different corporation’s stock today, but she must now pay a $45 commission fee. If she plans to sell this new stock exactly 1 year from now and realize the same return as she has just made, what must be the total amount she receives next year? Include the commission fee as a part of the purchase price, but neglect any tax effects.
Abby purchased 100 shares of her father’s favorite stock for $27 per share exactly 1 year ago, commission free. She sold it today for a total amount of $3125. She plans to invest the entire amount in a different corporation’s stock today, but she must now pay a $30 commission fee. If she plans to sell this new stock exactly 1 year from now and realize the same return as she has just made, what must be the total amount she receives next year? Include the commission fee as a part of the purchase price, but neglect any tax effects. What is the total amount that she receives next year?